£800,000 pay-off for rail chief as SRA is scrapped in reforms

Britain's rail chief stands to receive up to £800,000 in compensation after being forced out of the industry by the Government's sweeping reforms announced yesterday.

Britain's rail chief stands to receive up to £800,000 in compensation after being forced out of the industry by the Government's sweeping reforms announced yesterday.

As predicted by The Independent, Richard Bowker's Strategic Rail Authority (SRA) has been scrapped as part of ministers' determination to get a grip on costs and "simplify and streamline" a highly complex management structure.

Mr Bowker, the chairman of the SRA and a former senior director at Virgin Rail, has about two and a half years left on his contract and could seek maximum compensation for his departure, expected in September. Officials at the authority said the pay-off would be nearer £350,000 - a year's salary.

Mr Bowker said his staff had "rehabilitated" the railway. "There is now stability, clarity and certainty around major projects and train franchising, where before there was drift, doubt and confusion," he said.

The authority's responsibility for strategy and finance is to be assumed by the Department for Transport which will also establish a small agency for awarding franchises - another SRA role. The privately owned but state-backed infrastructure organisation Network Rail will take over the SRA's responsibility for monitoring the performance of train companies and drawing up timetables.

Under yesterday's White Paper, The Future of Rail, the responsibility for safety will be taken away from the Health and Safety Executive and passed to the Office of Rail Regulation (ORR). The ORR will keep its original function of protecting the rights of private sector organisations involved in the industry.

Primary legislation will be needed to implement some of the changes so the SRA is expected to remain in existence until the second half of next year.

As part of the reforms, Network Rail and train operating companies will be expected to work more closely in an attempt to end the present "confrontational" relationship. The number of train franchises will be reduced and more closely aligned with Network Rail's regional structure. A greater role is envisaged for the Scottish Executive, the Welsh Assembly, the Mayor of London and regional passenger transport executives.

Asked whether the buck would stop with him under the new regime, Mr Darling said he would be responsible for strategy and finance, but that it would be "nonsense" for ministers to get involved in the day-to-day running of the railway. That was Network Rail's job, he said.

Tim Yeo, the Conservative transport spokesman, said "shifting responsibilities around Whitehall" would not make the trains more reliable.

Digby Jones, the director general of the CBI, warned that the review must not lead to "bureaucrats micro-managing the rail network".

The Rail Passengers Council, which is to have its regional committees axed, said customers would reserve judgement until it was clear that trains were running on time and that the system was offering value for money.